Petrol 10p too expensive despite fall in costs

MOTORISTS are paying nearly 10p too much for a litre of petrol after a record fall in wholesale prices last month, according to analysis.

The RAC accused retailers of failing to pass on drops in the wholesale price of unleaded petrol to drivers.

Although average forecourt prices fell by 12.3p to 169.8p per litre at the end of August, the largest monthly drop since records began 22 years ago, the motoring organisation said they should have fallen further to around 161p.

Rod Dennis, a spokesman for the RAC, said: “Twelve pence a litre is a lot to come off prices in a single month so there’s no doubt things could be worse, but in reality drivers of petrol vehicles are still getting a raw deal at the pumps.

“For whatever reason, major retailers are choosing not to pass on in full the reductions in the wholesale price of unleaded they’ve been benefiting from for some considerable time.”

There is a very strong case for the biggest sellers of petrol to cut their forecourt prices further. The RAC said that at 161p, retailers would still be making a generous profit of 10p a litre.

“Some big supermarket sites aren’t too far off charging this – but there’s a real postcode lottery out there, with prices varying wildly depending on where a driver is in the country,” it said.

At 183.7p, the average price per litre of diesel at the end of August was a “fairer reflection of wholesale costs”, the RAC said. Fuel costs increased dramatically this year as the price of crude oil went up owing to the war in Ukraine.

Refinery costs also rose, adding to pressures on supply after refining capacity was mothballed during the pandemic. A drop in the value of the pound has further inflated prices as it pushed up the cost of imports.

Craig Mackinlay, the Tory MP and chairman of the Fair Fuel all-party parliamentary group, said: “We should be seeing reductions of at least 25p per litre across all pump fuels.” He called for the Competition and Markets Authority to find out why retailers are not passing on savings to consumers more quickly.